While a report last week said the proposed budget would leave Wisconsin in hundreds of millions of dollars in debt, a Republican assembly member said Tuesday he is confident legislators can ensure a balanced final budget.
The state’s Legislative Fiscal Bureau, a nonpartisan analysis agency, said the current provisions of Gov. Scott Walker’s biennial budget would create a $664 million deficit by 2015. Half of this deficit sum would result from Walker’s proposed tax cuts, according to the LFB’s statement.
Rep. Dean Kaufert, R-Neenah, acknowledges the accuracy of these projections from the LFB. However, he said he trusts lawmakers will balance the budget and not allow the state to fall back into the $3.6 billion debt from former Gov. Jim Doyle’s administration.
“We just spend a long time digging out of a hole,” Kaufert said. “To put ourselves back in structural deficit is not something I’m going to support. I think there are a lot of other fiscally responsible legislators that are concerned about digging ourselves back into that hole.”
Kaufert said he believes the Joint Committee on Finance will begin recommending amendments to the budget, which could avoid such an economic predicament by the third week in April.
Andrew Reschovsky, a public affairs and applied economics professor at University of Wisconsin’s La Follette School of Public Affairs, said the LFB’s deficit projection of more than $600 million is conservative. For example, he said that figure fails to account for the state’s projected population growth in the next two years.
He said Walker’s proposed tax cuts are a popular initiative but may not necessarily stimulate the economy.
“Legislators of both parties like to give tax breaks because it’s politically popular,” Reschovsky said. “The cost, obviously, is less revenue.”
He noted the economic growth spurred by cutting taxes may work at a national level. But, he said, having more money and spending more does not necessarily help the state financially because consumers may not be buying products made in Wisconsin, Reschovsky added.
Republican legislators continue to express concern over Walker’s budget proposal to borrow close to one billion dollars in order to fund transportation initiatives, Kaufert said.
“There are a lot of worthy projects out there,” Kaufert said. “We, the Republicans, are a little nervous and a little concerned about the total level of borrowing and may want to lower that.”
Reschovsky, an expert in Wisconsin government spending, said transportation spending is controversial in the Legislature because spending too much on highways and infrastructure takes state dollars from other public needs, such as education. Thus, he said, it is logical to make such investments through bonding, rather than through the general revenue stream.
Kaufert, a member of the Assembly’s Committee on Transportation, said spending on major transportation projects is valuable if lawmakers are “very careful and cautious” in their bonding.
“You have to have a good infrastructure in order to get economic development and help get goods and services from point A to point B,” Kaufert said, acknowledging Walker’s argument in favor of investing now when interest rates are low. “You have to do it fiscally responsibly.”
Among Walker’s proposed transportation investments are the Zoo Interchange and Hoan Bridge in Milwaukee, along with a highway connecting Madison and Beloit.
